GM executives' pay skyrocketed in '94

April 11, 1995|By Ted Shelsby | Ted Shelsby,Sun Staff Writer

General Motors Corp., which took a big step last year toward achieving one of the biggest turnarounds in U.S. corporate history, compensated its top managers richly for their performance.

In its proxy statement mailed to shareholders yesterday, the company disclosed that John F. Smith Jr., its president and chief executive, pocketed about $6.1 million in salary and other compensation last year.

This was more than four times his 1993 compensation.

According to the proxy, Mr. Smith, who took over as chief executive in 1992, was paid a base salary of $1.5 million. He received a $1.9 million bonus for 1994 and $2.3 million in deferred incentives.

Mr. Smith cashed in on stock options last year valued at $421,363.

Last year was the first time bonuses were paid to GM executives in four years.

The GM executive's paycheck was about equal to the $6.2 million that Chrysler Corp. paid its chairman, Robert Eaton, last year. He received $9.3 million in 1993.

Ford Motor Co. paid its chairman and chief executive, Alexander Trotman, $8.1 million in 1994 under terms of a new executive bonus compensation plan.

GM reported consolidated net income last year of $4.9 billion, almost double the $2.5 billion it earned the year before. On a per-share bases, that was equal to $5.15, up from $2.13.

Revenue rose 12.1 percent, to $154.95 billion from $138.2 billion.

Perhaps more important, the company's giant North American operations was in the black last year for the first time since 1989.

The North American division accounts for more than half of GM's sales. It posted a profit of $690 million, compared with a loss of $872 million in 1993.

GM had struggled in the early 1990s, posting big losses and raising concern that it might be forced into bankruptcy. Its 1992 loss, including a huge accounting charge for retiree health benefits, was a staggering $23.5 billion.

Mr. Smith was not the only GM executive to get a big raise as a result of the company's improved performance. According to the proxy, his top lieutenants also fared well. They include:

* William E. Hoglund, an executive vice president who retired at the end of the year. He was paid $3.23 million in salary and bonuses. With the exercise of some stock options, he received $786,000 in 1993.

* Harry Pearce, executive vice president, received $2.75 million. This was up from $712,747, including options.

* Louis Hughes, executive vice president in charge of GM's international operations, was paid a total of $2.73 million. In 1993 Mr. Hughes received $698,312.

* G. Richard Wagoner Jr., who was promoted from chief financial officer to executive vice president and placed in charge of the North American automotive operations, also received $2.73 million. This compares with $757,440, including the exercise of options, he received in 1993.

"That's not bad compensation for a year's work," Rodney A. Trump, president of United Auto Workers Local 239, said of Mr. Smith's pay. The union represents approximately 3,400 hourly workers at GM's van assembly plant on Broening Highway in Southeast Baltimore.

"I don't begrudge Jack the money," he added. "But I would like to see the working class get its fair share."

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